Rengo Co., Ltd. announces that, on January 15, 2021, it was resolved by Rengo's Board of Directors to enter into a memorandum of understanding with Taiko Paper Mfg., Ltd. (TPM) to consider supporting the business reconstruction of TPM, and the memorandum of understanding has been executed. TPM filed an application to commence corporate reorganization proceedings in the Tokyo District Court on January 15, 2021.

TPM is a paper manufacturing company in Fuji-shi, Shizuoka Prefecture that conducts the business of manufacturing and sales of kraft pulp, kraft paper and speciality paper (metals interleaving paper, paper towels, etc.) and recycling (the subject business).
The business performance of TPM has been stagnant due to factors such as the steep increase in prices of raw materials and intensified sales competition in recent years. As demand declined and financing tightened due to the spread of the COVID-19 pandemic at the start of last year, the company applied for commencement of corporate reorganization proceedings.
As well as seeking to improve the profitability of the subject business by the support of the Rengo Group for the business reconstruction of TPM, Rengo aims to add value to the Group's upstream supply chain by expanding into the manufacturing of kraft pulp and kraft paper, which are raw materials for the Rengo Group's paperboard and heavy duty packaging businesses. For these reasons, Rengo decided to enter into the memorandum of understanding and to proceed without delay to carry out consultations and examine implementation of the reconstruction support and the methods, etc. for doing so.

In association with the corporate reorganization proceedings of TPM, Rengo will examine supporting the reconstruction of the subject business with the aim of subsequently entering into a sponsor agreement providing for specific reconstruction support methods, etc., in consultation with TPM.